Even though he obtains the options for free, he does actually...

Even though he obtains the options for free, he does actually have to exercise them into full shares at an exercise price of $0.0075 per option.

Essentially this means he has to pay the company $300K out of his own pocket to acquire the shares. So it is not "money for jam", unless he pushes the share price well above $0.0075. If the SP gets to $0.01, then he would pocket $100K, if it gets to $0.015 he pockets $300K. Neither of these two exercise prices make him rich beyond measure and he'd be wanting to get the SP to these amounts at the very minimum.

Rather than just gift him shares, I think the options are a good incentive for him to work at raising the SP of the company. Considering his relatively modest salary for a CEO, I would assume that he'd be pretty eager to get his options well in the money so he can supplement his base salary with a big bonus through getting his options well into the money.

Also, it represents $300K revenue for the company. The only downside here is the dilution of 40,000,000 shares, which is approximately 1.5%. I can take that if he brings the SP to a level where the exercise of his options is worthwhile to him